At level 2, you can change into a dog twice per day. This doesn't change your stats, except for a faster move speed and a bonus to perception (and you can't cast spells).
This is useful for basically nothing, and it doesn't feel cool. If you're a shapechanger, you expect to be able to turn into anything you want, or at least get a choice for the one thing you want to be able to turn into. But no, every druid can turn into a dog (which I imagine wouldn't be anyone's first choice).
At level 5, you get Steed shape, which again is basically useless (especially because it has a slower speed than an actual horse). At level 6, if you're a moon circle druid, you get battle forms, and that's when it starts getting cool. At level 7, you get fish and rodent, and that's when it starts getting useful.
I agree that "dog" is not cool, but "wolf" and "fox" are, and are IMO what the Hound Shape is meant to be.
The increased senses are in fact what this form is supposed to be used for, i.e. simply to search for hidden targets (if the current implementation is underpowered compared to easily available low-level spells, then it should be fixed, but IMO the purpose is sound), in the same way that a trained hound or beagle would do. The form can also be used to travel in the woods or escape quickly, sort of an
Expeditious Retreat of long duration. Less common uses could be to threaten/intimidate someone (as a wolf), to hide yourself if someone's searching for you or go unnoticed while eavesdropping/spying on someone's (as a dog).
Maybe it feels underwhelming to you, but these are far from useless. Clearly they are not more powerful than 1st level spells, but I don't see why they should be since Hound Shape is available at level 2.
Steed Shape is clearly (and explicitly) meant for transportation of other people or load. I'm not sure if 5th level is a bit too late for that, but again there are good uses for this.
Fish Shape for water breathing and water travelling, Rodent Shape for infiltration and access to small spaces, Bird Shape for flying are no-brainers. Once again you can argue if the level required is too high compared to other classes achieving similar benefits from spells.
All this stuff is useful, but it is useless at one thing: combat. And that's totally by design... there are a lot of people who hated 3e Druids because of the combat exploitations of wild shape, and it's because of this that WotC designers have tried to move all combat usefulness of wildshape under a subclass, and leave only non-combat usefulness under the class.
Personally I'm very happy about this approach, except that I am also ready for disappointment once we get the last playtest update that will completely destroy this approach and give once again combat wildshape back to all druids.
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Last word about shapechangers: I don't know why you can say something like "If you're a shapechanger, you expect to be able to turn into anything you want". What does it mean? Can I say "if you're a spellcaster, you expect to be able to do anything you want with magic"?
Because when I played a Druid I never took it for granted that I should be able to turn into anything I want, just like when I played a summoner I never took it for granted that I should be able to summon anything I want. Some spells used to work like that, e.g.
Polymorph used to give you total freedom. Apart from the nightmares at the gaming table that this could cause, I never took it for granted that this is how it should work, i.e. to choose "anything I want".
For me the "sky is the limit" is a good feeling that a RPG can deliver, but it doesn't mean that a specific ability such as wildshape, polymorph or summoning must allow unlimited forms. The "unlimitedness" is rather something that exists in the future perspective, i.e. there is no limit to what you PC can
eventually learn to do, but not like there is no limit to what your PC can do at any specific time.